worldwide 2010 ANNUAL REPORT

Transcription

1 worldwide 2010 ANNUAL REPORT

2 Monster Worldwide, Inc. (NYSE: MWW) is the parent company of Monster.com, the premier global online employment solution for people seeking jobs and the employers who need great people. We ve been doing this for over 15 years, and have expanded from our roots as a job board to a global provider of a full array of job seeking, career management, recruitment and talent management products and services. At the heart of our success and our future is innovation: we are changing the way people think about work, and we re helping them actively improve their workforce performance with new technology, tools and practices.

3 Shareholder Letter THE GOOD NEWS AND THE GREAT NEWS: positive growth, and very strong customer interest in the new Monster To our shareholders, customers, employees and friends: The good news in 2010: the economy improved, our business rebounded across the globe, we reported revenue of $914 million and our bookings increased by 23% to $992 million. The great news: customer reaction to Monster s plans and products to transform the talent recruitment industry has been very strong, solidly positioning us for even greater growth and profitability in 2011 and beyond. Response to Monster has been so positive because customers are facing new complexities and challenges in talent acquisition. Despite the recession, our customers across the world tell us that it s getting harder and harder to find the right talent. The challenge for company recruiters, many of whose organizations remain understaffed from recent cutbacks, is how to find and match the best people to the right jobs amid an avalanche of candidates caused by the global recession and among the millions of potential candidates who aren t actively seeking jobs. Customers are hiring us because they see that recruiting in today s environment is a strategic process that requires strategic solutions. No one product, advertising approach, company career site, job fair campaign or social network will help employers consistently find the right talent by itself. Nor will it help the right talent find the right employer. The right strategy today is most likely to be a portfolio strategy of several of these approaches. This is why we ve invested in and diversified our products and services over the past three years. Today, Monster is the only company in the world to offer such diversified recruitment services, providing a portfolio of integrated solutions versus a product or two. Customers are also hiring us because they see the tremendous opportunities to bring more science and precision to recruiting and talent management. Our innovation investments in this regard are paying off, providing a competitive advantage to our customers and providing Monster with an advantage that will take years for our competitors to match. Here are some 2010 highlights. Creating new ways to advance the science of recruitment Our patented 6Sense semantic matching technology is the backbone of a growing family of products for both job seekers and employers. 6Sense technology understands the meaning and context of words, thereby dramatically improving the relevance of search results produced by queries. Our 6Sense technology has created the best job search engine in the business, bar none. It transforms traditional SOURCE keyword-based processes that frustrate both job seekers and recruiters into a smarter, faster, more precise way of identifying the best candidates and job opportunities. In 2010 we launched our highly successful Power Resume Search product - the first intuitive, intelligent semantic search engine developed specifically for human resource and recruiting professionals - in North America, the UK and France. Within one year of its launch in the U.S., we are pleased with the rate of customer adoption of Power Resume Search and its ability to command a price premium when compared to our classic search product. We also introduced our new job search for seekers powered by 6Sense technology, which is changing how they explore, find and apply for jobs on the Monster database. The pressures to evaluate candidates from multiple sources, manage larger scale recruiting processes, and find the best talent before your competitor does have become more complex than ever before. We are now embarking on further applications of 6Sense technology to solve one of the most daunting MATCH MANAGE

4 Shareholder Letter challenges facing employers: finding the right talent in an increasingly complex world across multiple platforms, channels and sites. So, in 2010 we began developing 6Sense Enterprise Suite, which will allow organizations to apply 6Sense technology to their own talent databases, whether or not candidates were sourced by Monster. We plan to introduce our 6Sense Enterprise Suite in the second half of Three other technology advances of note in 2010: more mobile applications for job seekers, an enhancement to our Career Ad Network product, and greater measurement capabilities in our Enhanced Analytics product. To provide job seekers with more options to search for jobs, in 2010 and early 2011 we expanded our iphone and Android mobile applications and introduced a new ipad application, allowing customers to log onto their Monster account, view and search job postings, and apply for jobs directly from their preferred mobile device. By doing this, we re giving people access to our superior products and services on their own terms, whenever and wherever they want to access them. Our Career Ad Network continued to blossom this year, with the number of customers utilizing this product increasing 67% from 2009 to Monster s Career Ad Network is the largest recruitment focused advertising network, reaching on average 93 million unique passive and active seekers each month globally with over 3.6 billion job ad impressions per month on thousands of sites. Through behavioral targeting, we provide customers NEW RESUMES 866,000 AVG. per month SITE TRAFFIC 23.7M unique visitors1 Newspaper Alliances Monster has alliances with over 1,000 daily and weekly newspapers in the U.S. driving local candidates to your job posting. the ability to present their job opportunities to passive candidates who fit their desired profile but who are not necessarily looking for a job. In 2010 we further expanded Monster s Career Ad Network and now offer this solution in all of the major European countries we serve. We also introduced Career Ad Network Direct that allows large customers with developed corporate career sites to use the product to drive further interest in their jobs directly to their own sites. To help our employer customers better understand the ROI of their Monster products and plan more effectively, we introduced Enhanced Analytics. This advanced-technology product provides employers with insight into the flow of how seekers engage in our advertising to show companies the importance of the role that Monster plays in driving interest in their jobs. Driving Even Greater Scale with the Successful Integration of HotJobs We also completed our acquisition of HotJobs, a leading online recruitment site, and integrated it with the Monster site. With this integration, an average of more than 25,000 new resumes are added to Monster.com every day, providing employers access to the world s most diverse marketplace of talent. The acquisition of HotJobs also provides greater recruitment advertising opportunities to our customers, both online and offline, across industries and in local markets, through the addition of HotJobs newspaper consortium members to the Monster network. The combined newspaper network now includes more than 1,000 daily and weekly newspapers in all 50 states. Expanding our global presence to reach an even more diverse talent marketplace NEWSPAPER READERSHIP We re finding that companies throughout the world have a shared interest in recruiting talent in new ways, and we have been capitalizing on this opportunity by growing our global footprint, which as of 2010 covers approximately 55 countries. Our strategy is paying off, as evidenced by healthy 2010 growth in global markets. For example, bookings increased throughout Asia Pacific: China by 38%, South Korea 67%, and India 39%. In 2010 we launched Monster in Brazil, a large market where we expect significant growth, as Brazil is one of the fastest growing major economies in the world, with an annual GDP growth rate of 7.5% in We also signed an exclusive deal with Yahoo! to drive traffic to Monster s properties in Brazil and to drive our expansion plans across Latin America. NEWS 78M AUDIENCE Internet Reach 11.1% 1 1. comscore, March 2011 Includes US Unique Visitors to all Monster Worldwide owned sites.

5 Shareholder Letter Financial performance Our financial performance improved consistently throughout 2010 and we were greatly encouraged by fourth quarter bookings, which increased 28%, and revenues, which increased 20% year over year. These sales activities are a result of successful execution of our strategic plan and an improving global economy. While we generated $914 million in revenue and $992 million in bookings in 2010, reporting a net loss was unacceptable. As we move ahead into 2011 and beyond, we are committed to driving both growth and profitability. We intend to leverage the investments we have made over the last 3 years and deliver not just solid bookings and revenue growth, but also an improvement in our operating margins and earnings. Committed to driving future success through innovation In a tough economy, many companies hunker down, reduce expenses and focus on improving what has worked in the past. Yet in today s fast-changing global economy what has worked in the past is unlikely to be what will work in the future. The most successful companies in the world create new business models to serve what customers need today and tomorrow. Not yesterday. At Monster, we re focused on innovation. We re transforming the recruiting industry by creating a diversified portfolio of products and services that will help people find the best job match for their talents, and will help employers more efficiently and precisely find and match the right talent wherever that talent may be in the world. We never stand still at Monster because we see a different tomorrow, and want to make sure that our customers have the most advanced and effective tools at their disposal. With thanks to our shareholders, customers and employees, Sal Iannuzzi Chairman, President and Chief Executive Officer

6 Form 10-K

7 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 n FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER MONSTER WORLDWIDE, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 622 Third Avenue, New York, New York (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (212) (REGISTRANT S TELEPHONE NUMBER, INCLUDING AREA CODE) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of Each Class Name of Each Exchange on Which Registered Common Stock, par value $.001 per share New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined under Rule 405 of the Securities Act. Yes No n Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes n No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No n Indicate by check whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No n Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer n Non-accelerated filer n Smaller reporting company n (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes n No The aggregate market value of common stock held by non-affiliates of the registrant was approximately $1,485,702,994 as of June 30, 2010, the last business day of the registrant s second fiscal quarter of As of January 20, 2011, there were 130,203,041 shares of the registrant s common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant s definitive Proxy Statement to be used in connection with its 2011 Annual Meeting of Stockholders are incorporated by reference into Part III of this report.

8 TABLE OF CONTENTS PART I ITEM 1. BUSINESS... 1 ITEM 1A. RISK FACTORS... 8 ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. [REMOVED AND RESERVED] PART II ITEM 5. MARKET FOR REGISTRANT S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Page i

9 Special Note About Forward-Looking Statements We make forward-looking statements in this report and in other reports and proxy statements that we file with the United States Securities and Exchange Commission ( SEC ). Except for historical information contained herein, the statements made in this report constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act ), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act ). Such forward-looking statements involve certain risks and uncertainties, including statements regarding our strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, among other things, the global economic and financial market environment; our ability to maintain and enhance the value of our brands, particularly Monster; competition; fluctuations in our quarterly operating results; our ability to adapt to rapid developments in technology; our ability to continue to develop and enhance our information technology systems; concerns related to our privacy policies and our compliance with applicable data protection laws and regulations; intrusions on our systems; interruptions, delays or failures in the provision of our services; our vulnerability to intellectual property infringement claims brought against us by others; our ability to protect our proprietary rights and maintain our rights to use key technologies of third parties; our ability to identify future acquisition opportunities or partners and the risk that future acquisitions or partnerships may not achieve the expected benefits to us; our ability to manage future growth; risks relating to our foreign operations; our ability to expand our operations in international markets; our ability to attract and retain talented employees, including senior management; potential write-downs if our goodwill or amortizable intangible assets become impaired; adverse determinations by domestic and/or international taxation authorities related to our estimated tax liabilities; effects of anti-takeover provisions in our organizational documents that could inhibit the acquisition of Monster Worldwide by others; volatility in our stock price; risks associated with government regulation; outcome of litigation we may become involved in from time to time; and other risks and uncertainties set forth from time to time in our reports to the SEC, including under Item 1A. Risk Factors of this report. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report. ii

10 ITEM 1. Introduction BUSINESS PART I Monster Worldwide, Inc. (together with its consolidated subsidiaries, the Company, Monster, Monster Worldwide, we, our or us ), parent company of Monster», the premier global online employment solution, strives to inspire people to improve their lives. With a presence in approximately 55 countries around the world, including key markets in North America, Europe, Asia and Latin America, Monster offers online recruiting solutions that we believe are redefining the way employers and job seekers connect. Through online media sites and services, Monster Worldwide delivers highly targeted audiences to advertisers. The Company is a member of the S&P 500 Index. Our principal executive offices are located at 622 Third Avenue, New York, New York Our telephone number is (212) and our Internet address is Our predecessor business was founded in 1967, and our current company was incorporated in Delaware and became a public company in We make all of our public filings with the SEC available on our website, free of charge, under the caption Investor Relations SEC Filings. Included in these filings are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, which are available as soon as reasonably practicable after we electronically file or furnish such materials with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. Our Strategy Monster Worldwide s long-term business strategy is designed to capitalize on the numerous opportunities that exist in the global online recruitment marketplace and related markets. Our strategy calls for strategic investment in product, technology, brand support and customer service to expand our global leadership position in an effort to achieve long-term growth and profitability and create shareholder value. In support of this strategy, we are investing in our operations on a global basis while controlling the growth of operating expenses. Monster s focus is on the needs of its customers, both employers and job seekers. We have created and introduced new products and services to improve the seeker experience while also developing deeper relationships with our employer customers. Through innovative products and a rebuilt website, we offer greater value to all job seekers who look to manage their careers, even those seekers who are not actively engaged in a job search. The improvements we have made to our product offerings and services are designed to enhance seeker engagement and increase job response rate. We believe that more active seeker engagement will translate directly into higher quality candidates for our employer customers. For employers, we have introduced tools and features that allow them to more efficiently and effectively attract and find the most relevant candidates for their job openings. Our investments in our technology platform have allowed us to deliver these innovative products and services on time and on a global basis. We have consolidated several technology systems and have created a platform that is more secure, scalable and redundant. Additionally, in 2008, we acquired Trovix Inc., a business that provides career-related products and services that utilize advanced search technology, focusing on key attributes such as skills, work history and education. We recently launched our Monster Power Resume Search» product to customers in North America, the United Kingdom and France, which is our innovative and proprietary semantic resume and job search database product based upon Trovix search technology. Our Power Resume Search product is the first of several new employer products we expect to launch from our 6Sense» technology platform. Our global sales structure allows us to sell and distribute our products and services to large, medium and small businesses on a local basis. Our objective is to offer existing customers additional products while expanding our coverage to attract new customers. Through our recent new product introduction and the multiple alliances we share with other companies that serve the human resources community, we have 1

11 increased the number of products we now provide customers beyond the core job postings and resume database offerings. In 2007, we introduced the Career Ad Network, or CAN, the industry s largest recruitmentfocused online advertising network that now reaches nearly 100 million internet users on a global basis. CAN distributes our customer s job advertisements across a broad array of targeted websites and is an effective way of expanding our customer s pool of active and passive seekers. We offer this innovative media product to customers in North America and most major markets in Europe. Additionally, we offer our customers application tracking services, diversity resume database services and other ancillary services either directly or through alliances to meet the changing needs of our customers. We service existing and potential customers through a field sales force, telephone sales force and an online service, which we refer to as our ecommerce channel, where the customer can post jobs and access the resume database without sales force involvement. We have integrated our field and telesales forces in the United States and aligned our sales resources regionally so we can operate more efficiently and provide a high touch, consultative service to customers. We believe that we are well positioned to effectively extend our geographic sales coverage and increase the penetration of existing customers. In order to support our new product launch and our expanded sales resources, we have invested in our customer service capabilities on a global basis. We have in-sourced, centralized and standardized our global call center operations to create a customer focused, proactive value added model. We are committed to expanding our share of the North America online recruitment market. On August 24, 2010, pursuant to an Asset Purchase Agreement dated as of February 3, 2010 between Monster and Yahoo! Inc. ( Yahoo! ), Monster completed the acquisition of substantially all of the assets exclusive to Yahoo! HotJobs (the HotJobs Assets ) from Yahoo! The purchase price for the HotJobs Assets was $225.0 million. We acquired the HotJobs Assets, among other objectives, to expand our business in the North American online recruitment market. Our growth strategy includes global geographic expansion. We believe there is a large opportunity to extend our penetration in existing markets in Europe, Asia and Latin America, in addition to extending our presence beyond the markets we currently serve. In October 2008, we completed the acquisition of China HR.com Holdings Ltd. (together with its subsidiaries, ChinaHR ), a leading online recruiter, serving employers and job seekers in major provinces in the People s Republic of China. We believe there exists a significant opportunity to expand our presence in the People s Republic of China over time. In November 2008, the Company acquired a 50% equity interest in a company that provides online employment solutions in Australia. Additionally, the Company launched a site in Brazil in 2010 which we believe could result in significant growth in the future due to the size of the Brazilian market. We continue to actively and aggressively support the Monster brand on a global scale through strategic investments in both online and offline advertising and promotion. Our advertising and promotion activities are designed to drive quality visitors to Monster.com and our affiliated online properties. We have centralized our media purchases and changed the timing of our media buying to receive beneficial rates, resulting in greater efficiencies for our marketing expenditures. Additionally, we have entered into a traffic agreement with Yahoo!, which became effective on August 24, 2010, whereby Monster became Yahoo! s exclusive provider of career and job content on the Yahoo! homepage in the United States and Canada. We are also committed to entering adjacent markets. Our acquisition in January 2008 of Affinity Labs Inc. has allowed us to provide highly relevant content to our job seekers through a portfolio of professional and vocational communities, which we call Monster Communities. It also provides employers access to a large, hard-to-reach pool of job candidates and allows us to expand our core product more aggressively. Our Services We operate in three reportable segments: Careers North America, Careers International and Internet Advertising & Fees. For the year ended December 31, 2010, these operating segments represented approximately 46%, 40% and 14% of our consolidated revenue, respectively. During the second quarter of 2008, we discontinued the operations of Tickle Inc., an online property within the Internet Advertising & Fees segment, 2

12 which no longer fit the Company s long term growth plans. See Note 17 to our consolidated financial statements for further discussion of our segment results. Careers (North America and International) Monster is the premier global online employment solution, striving to inspire people to improve their lives. Monster has a presence in approximately 55 countries around the world. We earned 42%, 42% and 45% of our total revenue outside of the United States in the years ended December 31, 2010, 2009 and 2008, respectively. With a local presence in key markets in North America, Europe, Asia and Latin America, Monster works by connecting employers with quality job seekers at all levels and by providing searchable jobs and career management resources online. We have been able to build on Monster s brand and create worldwide awareness by offering online recruiting solutions that we believe are redefining the way employers and job seekers connect. For the employer, our goal is to provide the most effective solutions and easiest to use technology to simplify the hiring process and deliver access to our community of job seekers. For job seekers, our purpose is to improve their careers by providing work-related content, services and advice. Our services and solutions include searchable job postings, resume database access, recruitment media solutions throughout our network and other career-related content. Job seekers can search our job postings and post their resumes on each of our career websites. Employers and human resources companies pay to post jobs, search our resume database, and utilize career site hosting and other services such as recruitment media. Monster has traditionally targeted the enterprise market, or those businesses that we consider to be among the 1,500 largest organizations globally. However, we are also focusing our efforts on expanding our penetration into the small-to-medium sized businesses ( SMBs ), those businesses with approximately 10 to 2,000 employees that operate primarily in local and regional markets. We currently have alliances with media and publishing companies, including approximately 1,000 newspapers, which extends our presence with local and regional job seekers in various markets across the United States. Internet Advertising & Fees Our Internet Advertising & Fees segment provides consumers with content, services and useful offerings that help them manage the development and direction of their current and future careers, while providing employers, educators and marketers with innovative and targeted media-driven solutions to impact these consumers at critical moments in their lives. Our network of online properties appeals to advertisers and other third parties as these sites cost-effectively deliver certain discrete demographic groups in a relevant and engaging online environment. We believe that by strengthening our user engagement, driving additional traffic and increasing usage of our websites, we can increase the appeal to our customers and reward them with a higher return on their marketing investment. Our sites are constantly evolving to integrate new and innovative features, in order to provide the relevant content that connects with our users. Revenue for the Internet Advertising & Fees segment is derived primarily from three types of services: lead generation, display advertising and products sold to consumers for a fee. Lead generation is a highly scalable direct response business in which marketers pay for connections to consumers whose demographics and interests match the requirements of specific business offerings. Our large database of users and ongoing collection of numerous points of data allows us to provide our clients with targeted and valuable leads. Display advertising opportunities have been integrated across the Monster Worldwide network of websites, allowing marketers to deliver targeted online advertising messages via numerous sizes and formats of creative units. Consumers come to Monster s websites for information and advice on how to manage critical life transitions, and this environment is typically seen by marketers as desirable for the promotion of products and services as consumers are actively looking for new ideas and solutions. Premium content and services is the final service provided under the Internet Advertising & Fees segment and allows consumers to pay for access to information and tools that provide greater support in the development of their educational and career opportunities. Our largest customer categories are employers, schools, and consumer products and services. Employers use our media solutions to attract job seekers to job postings and to help job seekers better understand what it 3

13 is like to work for a particular employer. Schools find our advertising and lead generation services to be effective tools in attracting students to investigate enrollment in higher education programs. Marketers of a variety of consumer products and services categories, including automotive, telecommunications, apparel and entertainment, have come to us to provide cost-effective and highly targeted solutions to connect with specific consumer segments. Sales and Marketing The Company s sales resources consist of field sales, telesales, and a self service ecommerce channel. The Company has also created a global account team to provide further support for our customers who have global recruiting needs. Our sales activities are geared towards large, medium and small companies as well as government agencies, advertising agencies and educational institutions. The field and telesales resources for our Careers business in the United States are regionalized to better serve our customers with a more high touch, consultative approach, while providing greater efficiencies for developing new business opportunities. We have specialty units within the sales organization, dedicated to serving our vertical markets, such as enterprise, SMBs, government, healthcare and staffing. Our telesales staff is primarily responsible for telemarketing and customer service for SMBs and is located in our offices around the world. Our field sales staff focuses on both local and national clients and is also dispersed throughout our offices globally. Our ecommerce channel is available to all customer groups and is currently most heavily used by smaller employers. Our Internet Advertising & Fees sales force is located throughout the United States and is focused on cross-selling the products of each property within its network. New sales representatives who join the sales force during the year undergo a rigorous training program. We use sponsorships and broad-based media, such as broadcast television, the Internet, radio, and business, consumer and trade publications, to market and promote the Monster brand. The majority of our marketing and promotion expense is allocated to our Careers North America and Careers International segments. Customers Our customers are comprised of individuals, small and medium-sized organizations, enterprise organizations, federal, state and local government agencies and educational institutions. No one customer accounts for more than 5% of our total annual revenue. Competition The markets for our services and products are highly competitive and are characterized by pressure to win new customers, expand the market for our services and incorporate new capabilities and technologies. We face competition from a number of sources. These sources include other employment-related websites, general classified advertising websites, professional networking and social networking websites, traditional media companies (primarily newspaper publishers), Internet portals, search engines and general-interest websites such as blogs. The barriers to entry into Internet businesses like ours are relatively low. As a result, new competitors continuously arise. Low-cost and free classified advertising websites are gaining increased acceptance with employers. Professional networking websites and social networking sites have also made significant strides in attracting employers who in the past had focused on traditional media and large job boards. Additionally, over the past several years many niche career websites have been launched targeted at specific industry verticals. Many of our competitors or potential competitors have long operating histories, and some have greater financial, management, technological, development, sales, marketing and other resources than we do. In addition, our ability to maintain our existing clients and generate new clients depends to a significant degree on the quality of our services, pricing and reputation among our clients and potential clients. Intellectual Property Our success and ability to compete are dependent in part on the protection of our domain names, trademarks, trade names, service marks, patents and other proprietary rights. We rely on copyright laws to 4

14 protect the original website content that we develop. In addition, we rely on federal, state and foreign trademark laws to provide additional protection for the identifying marks appearing on and the design and appearance of our Internet sites. A degree of uncertainty exists concerning the application and enforcement of copyright and trademark laws to the Internet, and there can be no assurance that existing laws will provide adequate protection for our original content or the appearance of our Internet sites. In addition, because copyright laws do not prohibit independent development of similar content, there can be no assurance that copyright laws will provide any competitive advantage to us. We also assert common law protection on certain names and marks that we have used in connection with our business activities. We rely on trade secret, copyright and patent laws to protect the proprietary technologies that we have developed to manage and improve our Internet sites and advertising services, but there can be no assurance that such laws will provide sufficient protection to us, that others will not develop technologies that are similar or superior to ours, or that third parties will not copy or otherwise obtain and use our technologies without authorization. We have obtained patents and applied for several other patents with respect to certain of our software systems, methods and related technologies, but there can be no assurance that any pending applications will be granted or that any patents will not in the future be challenged, invalidated or circumvented, or that the rights granted thereunder will provide us with a competitive advantage. In addition, we rely on certain technology licensed from third parties, and may be required to license additional technology in the future, for use in managing our Internet sites and providing related services to users and advertising customers. Our ability to generate fees from Internet commerce may also depend on data encryption and authentication technologies that we may be required to license from third parties. There can be no assurance that these third-party technology licenses will be available or will continue to be available to us on acceptable commercial terms or at all. The inability to enter into and maintain any of these technology licenses could significantly harm our business, financial condition and operating results. Policing unauthorized use of our proprietary technology and other intellectual property rights could entail significant expense and could be difficult or impossible, particularly given the global nature of the Internet and the fact that the laws of other countries may afford us little or no effective protection of our intellectual property. We have been named as defendants in two pending lawsuits alleging that we have infringed on patents of third parties. There can be no assurance that other third parties will not assert against us claims of patent, copyright or trademark infringement. We anticipate an increase in patent infringement claims involving Internet-related technologies as the number of products and competitors in this market grows and as related patents are issued. Further, there can be no assurance that third parties will not claim that we have misappropriated their trade secrets, creative ideas or formats or otherwise infringed their proprietary rights in connection with our Internet content or technology. Any claims of infringement or misappropriation, with or without merit, could be time consuming to defend, result in costly litigation, divert management attention, and require us to enter into costly royalty or licensing arrangements. If a party claiming infringement is successful, we could be required to pay substantial licensing fees or compensatory or punitive damages, and we could be enjoined from using important technologies or methods. If we are enjoined, it may not be possible or commercially practical for us to develop or obtain and implement substitute technologies or methods that are not covered by the third party s intellectual property. Any of these outcomes could significantly harm our business, financial condition and operating results. Employees As of January 20, 2011, we employed approximately 5,850 people worldwide, an increase of 150 employees over the prior year, primarily resulting from increased hiring in the Asia Pacific region as well as the acquisition of the HotJobs Assets, partially offset by decreased headcount in North America (excluding the impact of the acquisition of the HotJobs Assets) and Europe. 5

15 Executive Officers As of January 27, 2011, our executive officers were as follows: Name Age Position Salvatore Iannuzzi Chairman of the Board of Directors, President and Chief Executive Officer Timothy T. Yates Executive Vice President, Director James M. Langrock Executive Vice President and Chief Financial Officer Darko Dejanovic Executive Vice President, Global Chief Information Officer and Head of Product Lise Poulos Executive Vice President and Chief Administrative Officer Salvatore Iannuzzi has been Chairman of the Board of Directors, President and Chief Executive Officer of the Company since April Prior to joining the Company, Mr. Iannuzzi served as President of Motorola, Inc. s Enterprise Mobility business from January 2007 to April Prior to that, Mr. Iannuzzi served as President and Chief Executive Officer of Symbol Technologies, Inc. ( Symbol ), a publicly traded company engaged in the business of manufacturing and servicing products and systems used in end-to-end enterprise mobility solutions, from January 2006 to January 2007, when Symbol was sold to Motorola, Inc. He previously served as Symbol s Interim President and Chief Executive Officer and Chief Financial Officer from August 2005 to January 2006 and as Senior Vice President, Chief Administrative and Control Officer from April 2005 to August He also served as a director of Symbol from December 2003 to January 2007, serving as the Non-Executive Chairman of the Board from December 2003 to April From August 2004 to April 2005, Mr. Iannuzzi was a partner in Saguenay Capital, a boutique investment firm. Prior thereto, from April 2000 to August 2004, Mr. Iannuzzi served as Chief Administrative Officer of CIBC World Markets. From 1982 to 2000, he held several senior positions at Bankers Trust Company/Deutsche Bank, including Senior Control Officer and Head of Corporate Compliance. Timothy T. Yates has been our Executive Vice President and a Director since June From June 2007 until January 27, 2011, Mr. Yates also served as our Chief Financial Officer. Prior to joining the Company, Mr. Yates served as Senior Vice President, Chief Financial Officer and a director of Symbol from February 2006 to January From January 2007 to June 2007, he was a Senior Vice President of Motorola, Inc. s Enterprise Mobility business responsible for Motorola s integration of Symbol. From August 2005 to February 2006, Mr. Yates served as an independent consultant to Symbol. Prior to this, from October 2002 to November 2005, Mr. Yates served as a partner and Chief Financial Officer of Saguenay Capital, a boutique investment firm. Prior to that, he served as a founding partner of Cove Harbor Partners, a private investment and consulting firm, which he helped establish in From 1971 through 1995, Mr. Yates held a number of senior leadership roles at Bankers Trust New York Corporation, including serving as Chief Financial and Administrative Officer from 1990 through James M. Langrock was appointed Executive Vice President and Chief Financial Officer, effective as of January 27, From May 2008 until his recent promotion, Mr. Langrock served as the Company s Senior Vice President, Finance and Chief Accounting Officer. Prior to joining the Company, Mr. Langrock was Vice President, Finance of Motorola, Inc. s Enterprise Mobility business from January 2007 to April From May 2005 to January 2007, Mr. Langrock served as the Vice President, Chief Accounting Officer and Corporate Controller at Symbol. From December 2003 to May 2005, Mr. Langrock was Symbol s Vice President Internal Audit. Before joining Symbol, he served as Chief Financial Officer at Empress International, Ltd., an importer and wholesale distributor, from May 2002 to November From 1991 to April 2002, Mr. Langrock held a variety of audit positions at Arthur Andersen LLP, including Senior Manager in the Audit and Business Advisory Practice. Darko Dejanovic has been Executive Vice President, Global Chief Information Officer and Head of Product since November Previously, he had served as Executive Vice President and Global Chief Information Officer since July 2007, and as Senior Vice President and Global Chief Information Officer since 6

16 April Prior to joining the Company, Mr. Dejanovic served as Senior Vice President and Chief Technology Officer for Tribune Company, a publicly traded media company, from December 2004 until March During that same period, Mr. Dejanovic also served as Vice President and Chief Technology Officer of Tribune Publishing Company, a subsidiary of the Tribune Company, a position he held since Before joining the Tribune Company, Mr. Dejanovic had technology leadership roles for the Education Management Group, a provider of post-secondary education, and for the European Community Monitor Mission, an international public policy organization. Lise Poulos has been Executive Vice President and Chief Administrative Officer since January Previously, she had served as Executive Vice President since September Prior to joining the Company, Ms. Poulos served as Senior Vice President, Human Resources of Motorola, Inc. s Enterprise Mobility business from January 2007 to July From 1997 to January 2007, Ms. Poulos held various roles at Symbol, including Senior Vice President, Human Resources and Corporate Communications from August 2006 to January 2007, Vice President, Human Resources from November 2005 to August 2006 and Director, Human Resources from 2002 to November Prior to joining Symbol, Ms. Poulos worked at a major energy company and in the financial services industry 7

17 ITEM 1A. RISK FACTORS The existing global economic and financial market environment has had, and may continue to have, a negative affect on our business and operations. Because demand for our services is sensitive to changes in the level of economic activity, our business has suffered during economic downturns. Many companies hire fewer employees when economic activity is slow. As a result, demand for our services is reduced, which leads to lower sales. If the economy does not fully recover or worsens, demand for our services and our sales may be further reduced. In addition, lower demand for our services may lead to lower prices for our services. The volatility in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if the economy does not fully recover or worsens, our business, results of operations and financial condition could be materially and adversely affected. We rely on the value of our brands, particularly Monster, and the costs of maintaining and enhancing our brand awareness are increasing. Our success depends on our brands and their value. Our business would be harmed if we were unable to adequately protect our brand names, particularly Monster. We believe that maintaining and expanding the Monster brand is an important aspect of our efforts to attract and expand our user and client base. We also believe that the importance of brand recognition will increase due to the growing number of Internet sites and the relatively low barriers to entry. We have spent considerable money and resources to date on the establishment and maintenance of the Monster brand. We are devoting greater resources to advertising, marketing and other brand-building efforts to preserve and enhance consumer awareness of the Monster brand. Despite this, we may not be able to successfully maintain or enhance consumer awareness of the Monster brand and, even if we are successful in our branding efforts, such efforts may not be cost-effective. If we are unable to maintain or enhance consumer awareness of the Monster brand in a cost-effective manner, our business, operating results and financial condition may be harmed significantly. We also are susceptible to others imitating our products and brands, particularly our Monster brand, and infringing on our intellectual property rights. We may not be able to successfully protect our intellectual property rights, upon which we are dependent. While we believe we have strong trademark protection in the Monster brand worldwide in the careers and recruitment business, that protection does not extend fully to other businesses. Other companies and organizations use the Monster name, and more may do so in the future. This use could adversely affect our brand recognition and reputation if employers or job seekers confuse us with these other organizations. In addition, the laws of foreign countries do not necessarily protect intellectual property rights to the same extent as the laws of the United States. Imitation of our products or brands, particularly our Monster brand, or infringement of our intellectual property rights could diminish the value of our brands or otherwise reduce our revenues. Our markets are highly competitive. The markets for our services are highly competitive. They are characterized by pressures to: reduce prices; incorporate new capabilities and technologies; and accelerate hiring timelines. Furthermore, we face competition from a number of sources. These sources include: other employment-related websites, including large national and international competitors as well as niche career websites targeted at specific industry verticals; general classified advertising websites, some of which offer a low-cost or free alternative to our offerings; 8

18 professional networking and social networking websites; traditional media companies, including newspapers; and Internet portals, search engines and general-interest websites such as blogs. Low-cost and free classified advertising websites are gaining increased acceptance with employers. Professional networking websites have also made significant strides in attracting employers who in the past have focused on traditional media and large job boards. Additionally, over the past several years many niche career websites have been launched targeted at specific industry verticals. Many of our competitors, or potential competitors, have long operating histories, and some may have greater financial resources, management, technological development, sales, marketing and other resources than we do. Some of our competitors have more diversified businesses or may be owned by entities engaged in other lines of business, allowing them to operate their directly competitive operations at lower margins than our operations. In addition, our ability to maintain our existing clients and attract new clients depends to a large degree on the quality of our services and our reputation among our clients and potential clients. Due to competition, we may experience reduced margins on our products and services, loss of market share or diminished use of our services by job seekers and our customers. If we are not able to compete effectively with current or future competitors as a result of these and other factors, our business, financial condition and results of operations could be significantly harmed. We have no significant proprietary technology that would preclude or inhibit competitors from entering the online advertising market. Existing or future competitors may develop or offer services and products that provide significant performance, price, creative or other advantages over our services. If we do not keep pace with product and technology advances, there could be a material adverse effect on our competitive position, revenue and prospects for growth. This could significantly harm our business, financial condition and operating results. Our operating results fluctuate from quarter to quarter. Our quarterly operating results have fluctuated in the past and may fluctuate in the future. These fluctuations are a result of a variety of factors, including, but not limited to: the timing and amount of existing clients subscription renewals; entering new markets; enhancements to existing services; the hiring cycles of employers; changes in general economic conditions, such as recessions, that could, among other things, affect recruiting efforts generally and online recruiting efforts in particular; the magnitude and timing of marketing initiatives; the maintenance and development of our strategic relationships; our ability to manage our anticipated growth and expansion; our ability to attract and retain customers; technical difficulties or system downtime affecting the Internet generally or the operation of our products and services specifically; enhancements to technology to safeguard against security breaches; and the timing and integration of our acquisitions. 9

19 We face risks relating to developing technology, including the Internet. The market for Internet products and services is characterized by rapid technological developments, frequent new product introductions and evolving industry standards. The emerging character of these products and services and their rapid evolution will require continuous improvement in the performance, features and reliability of our Internet content, particularly in response to competitive offerings. We may not be successful in responding quickly, cost effectively and sufficiently to these developments. In addition, the widespread adoption of new Internet technologies or standards could require us to make substantial expenditures to modify or adapt our websites and services. This could harm our business, financial condition and operating results. The online recruiting market continues to evolve. The adoption of online recruiting and job seeking services, particularly among those companies that have historically relied upon traditional recruiting methods, requires the acceptance of a new way of conducting business, exchanging information, advertising and applying for jobs. Many of our potential customers, particularly smaller companies, have not utilized the Internet as a recruiting tool, and not all segments of the job-seeking population use the Internet to look for jobs. Companies may not continue to allocate portions of their budgets to Internet-based recruiting and job seekers may not use online job seeking methods. As a result, we may not be able to effectively compete with traditional recruiting and job seeking methods. If Internet-based recruiting does not remain widely accepted or if we are not able to anticipate changes in the online recruiting market, our business, financial condition and operating results could be significantly harmed. New Internet services or enhancements that we have offered or may offer in the future may contain design flaws or other defects that could require expensive modifications or result in a loss of client confidence. Any disruption in Internet access or in the Internet generally could significantly harm our business, financial condition and operating results. Slower response times or system failures may also result from straining the capacity of our software, hardware or network infrastructure. To the extent that we do not effectively address any capacity constraints or system failures, our business, results of operations and financial condition could be significantly harmed. Trends that could have a critical impact on our success include: rapidly changing technology in online recruiting; evolving industry standards relating to online recruiting; developments and changes relating to the Internet; evolving government regulations; competing products and services that offer increased functionality; changes in employer and job seeker requirements; and customer privacy protection concerning transactions conducted over the Internet. We rely heavily on our information systems and if our access to this technology is impaired, or we fail to further develop our technology, our business could be significantly harmed. Our success depends in large part upon our ability to store, retrieve, process and manage substantial amounts of information, including our client and candidate databases. To achieve our strategic objectives and to remain competitive, we must continue to develop and enhance our information systems. Our future success will depend on our ability to adapt to rapidly changing technologies, to adapt our information systems to evolving industry standards and to improve the performance and reliability of our information systems. This may require the acquisition of equipment and software and the development, either internally or through independent consultants, of new proprietary software. Our inability to design, develop, implement and utilize, in a cost-effective manner, information systems that provide the capabilities necessary for us to compete effectively could significantly harm our business, results of operations or financial condition. 10

20 Concerns relating to our privacy policies and our compliance with applicable data protection laws and regulations could damage our reputation and deter current and potential customers, job seekers and other Internet users from using our products and services and subject us to fines. Concerns about our practices with regard to the collection, use, disclosure or security of personal information or other privacy-related matters, even if unfounded, could damage our reputation, which in turn could significantly harm our business, financial condition and operating results. While we strive to comply with all applicable data protection laws and regulations, as well as our own posted privacy policies, any failure or perceived failure to comply may result in proceedings or actions against us by government entities or others, which could potentially have an adverse effect on our business. Moreover, failure or perceived failure to comply with applicable laws, regulations, requirements or our policies related to the collection, use, sharing or security of personal information or other privacy-related matters could result in a loss of confidence in us by customers, job seekers and other Internet users and could expose us to fines and penalties and could require us to expend significant sums in connection with any failure or perceived failure, each of which could adversely affect our business, financial condition and results of operations. Laws related to data protection continue to evolve. It is possible that certain jurisdictions may enact laws or regulations that impact our ability to offer our products and services and/or result in reduced traffic or contract terminations in those jurisdictions, which could harm our business, financial condition and results of operations. Intrusions on our systems could damage our business. Despite our implementation of network security measures, our servers are vulnerable to cyber attacks, computer viruses, worms and other malicious software programs, physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems. Unauthorized access could jeopardize the security of information stored in our systems relating to our customers, job seekers and other website users, and can lead to phishing schemes whereby unauthorized persons pose as Monster representatives and seek to obtain personal information from our customers and job seekers. In addition, malware or viruses could jeopardize the security of information stored or used in a user s computer. We have experienced these intrusions in the past. We may also experience these intrusions in the future and may be required to expend significant sums and resources to safeguard against them. Moreover, negative publicity arising from any intrusion is damaging to our reputation and may adversely impact traffic to our sites. Accordingly, any intrusion could significantly harm our business, financial condition and results of operations. Interruptions, delays or failures in the provision of our services could damage our brand and harm our operating results. Our systems are susceptible to outages and interruptions due to fire, floods, power loss, telecommunications failures, terrorist attacks and similar events. Our systems continuing and uninterrupted performance is critical to our success. Customers, job seekers and other website users may become dissatisfied by any system failure that interrupts our ability to provide our services to them, including failures affecting our ability to serve web page requests without significant delay to the viewer. Sustained or repeated system failures would reduce the attractiveness of our solutions to customers, job seekers and other Internet users and result in reduced traffic, contract terminations, fee rebates and make goods, thereby reducing revenue. Moreover, negative publicity arising from these types of disruptions is damaging to our reputation and may adversely impact traffic to our sites. We do not have multiple site redundancy for all of our services and some of our systems are not fully redundant in the event of any such occurrence. In an effort to reduce the likelihood of a geographical or other disaster impacting our business, we have distributed, and intend to continue assessing the need to distribute, our servers among additional data centers. Failure to execute these changes properly or in a timely manner could result in delays or interruptions to our service, which could result in a loss of users and damage to our brand, and harm our operating results. We may not carry sufficient business interruption insurance to compensate us for losses that may occur as a result of any events that cause interruptions in our service. 11